What are State Health Insurance Exchanges?

The Patient Protection and Affordable Care Act, passed in 2010, is the most significant healthcare reform in the United States in over forty years. Known colloquially as Obamacare, the PPACA contains multiple mandates that have created massive controversy within the U.S. government, as well as producing a government shutdown starting on October 1st, 2013. The mandates include the order that all small business owners with 50 or more full-time employees must provide some kind of health insurance coverage for their full-time staff, as well as a clause which states that all persons without health insurance coverage must pay to enroll in a government-subsidized plan or pay a financial penalty to opt out ($95 or 1% of their total income, whichever is greater).

The Affordable Care Act (ACA) also houses legislation regarding the creation of state health insurance exchanges, which are state-run health insurance marketplaces that offer a variety of health insurance coverage plans and in many cases may be federally subsidized. These state exchanges also typically have strict regulations regarding who may be covered and how, with detailed information on continued enrollment and requirements for small business owners who employ the requisite amount of full-time staff. Understandably, many state exchanges also have rules governing who is eligible to mediate conflicts of interest: these mediators cannot be employed or affiliated with an insurance company or a healthcare provider. This ensures that those appointed to resolve legislative conflicts will not have a vested interest in bureaucracy, but rather in making sure that patients receive the care they need.

Funding for state exchanges is available from several sources. There are Consumer Assistance Program Grants, Territory Cooperative Agreements, Early Innovator Grants, Navigator Grants, and Planning and Establishment Grants, all of which offer substantial sums. Within these state exchanges, patients will be able to observe and compare pricing for several different kinds of health insurance coverage, as well as seeing where these options are offered within their state. Also of great help to small business owners will be the Small Business Health Options Program (SHOP), a part of the Affordable Care Act’s legislation that deals with a nationwide marketplace for small business owners to compare potential health insurance coverage packages for their full-time staff.

Finally, theses state-run health exchanges help implement the specific changes Obamacare makes to local care, such as the removal of lifetime limits from health insurance coverage and the penchant for many businesses to eliminate coverage for those with pre-existing conditions. Though the ACA is poised to offer coverage to millions of Americans who did not have it before, the government shutdown beginning October 1st, 2013 may be just the first of many bitter partisan conflicts over its funding and implementation, despite the fact that it was signed into law in 2010.